Pulmonary surfactant is a heterogeneous complex consisting of surface active phospholipids and specific proteins synthesized and secreted by Type II cells in the alveoli of the lungs. The major lipid component of surfactant is dipalmitoylphosphatidylcholine and the major protein component is surfactant protein A (SP-A). SP-A is a specific surfactant- associated protein found only in the lungs. The function of DPPC is to lower surface tension at the air/cell interface and the function of SP-A appears to be to assist in this process. Biosynthesis and secretion of these substances by alveolar Type II cells is critical for the stabilization and function of the lungs. Silica dust causes massive increases in the pulmonary content of both surfactant phospholipids and SP- A. We have shown that these increases are due to the activation of some, but not all, Type II cells: activated Type II cells make and secrete surfactant phospholipids and proteins at a rate many times faster than normal Type II cells. To understand how silica dust brings about the activation of Type II cells, we are studying regulation of surfactant protein genes in Type II cells and seeking to identify factors capable of upregulating the transcription of those genes. We have mapped the distribution of SP-A in isolated Type II cells using confocal laser scanning microscopy and found that SP-A is localized mainly in the lamellar bodies. However, we also found SP-A in the nucleus of the Type II cell and associated with the perinuclear membrane. In addition we have shown that extracellular SP-A is taken up by isolated Type II cells and distributed in the cell in a manner consistent with its localization in lysosomes and lamellar bodies. In addition, some of the ingested SP-A appears to be translocated to the perinuclear membrane and into the nucleus itself. We do not know the functions of nuclear SP-A at this time but speculate that it could be involved in regulation of the surfactant system. Stimulation of surfactant production in Type II cells is dependent upon the inflammatory condition generated in the lungs by silica. We hypothesize that the surfactant effects arise as a result of the inflammatory condition and, therefore, cellular factors may be released by inflammatory cells that are capable of regulating surfactant production in alveolar Type II cells. Evidence suggests that interleukin-1beta and tumor necrosis factor-alpha may be part of this stimulatory process because both mRNAs of both cytokines are elevated within a few hours following exposure of rats in silica.